Mixed feelings over mixed-development projects

At a glance: The launch of the KL Metropolis provides attendees with a first-hand view of how the mixed-development project is going to take shape.

Concerns rising over the possibility of an oversupply of office and retail space

As a new line of mixed large-scale property developments go on stream to spur economic growth, market observers and those involved in the property sector are cautious. Their main concern: an oversupply of officespace.

Reports and data coming from think tanks suggest there are concerns about the situation, despite some assurances that the Government has already done proper studies and planning.

Among the projects are the KL Metropolis by Naza TTDI Sdn Bhd that will add millions of square feet space of office, retail and residential space, in addition to the ongoing KL Sentral project and the recent launch of the KL International Financial District (KLIFD).

Property consultant Rahim & Co, through an e-mail, tells StarBizWeek that as for the first quarter, occupancy rates of prime offices in Kuala Lumpur and Petaling Jaya range between 60% and 97% and a healthier 75% and 98% respectively.

“We are in the opinion that the oversupply cannot be solely attributed to these mega-projects but also other stand alone purpose-built offices in the city centre,” the statement says.

Excluding the upcoming mega-projects, a total of 6.69 million sq ft of new office space will be completed in Kuala Lumpur by 2015. Based on an average annual take up of 1.8 million sq ft of office space in Kuala Lumpur, Rahim & Co estimates the occupancy rate of prime office building to be between 82% and 85%.

However, with the effort and incentives put forward by the Government, it believes more multi-national companies will be operating in Kuala Lumpur, and will subsequently occupy the available office space.

“We expect rental rates to stabilise in the next few years, especially with the completion of new office buildings by 2015 in Kuala Lumpur. Average rental rates of prime office buildings in Kuala Lumpur is expected to moderate around RM7 per sq ft by 2015 compared with current rates averaging at RM6 per sq ft,” it says.

Rahim & Co adds that due to locational factors, for example, integration with rail network and image branding, the mega-projects will be able to command higher rental rates; potentially 5% to 10% more than the average rate.

To date, it says the total net lettable area of prime office space in Kuala Lumpur stood at 40.88 million sq ft. By the end of 2011 and 2015, an estimated 6.69 million sq ft of new office space will be completed in Kuala Lumpur (excluding KL Metropolis and KLIFD) and most of these projects are currently under construction; contributed largely by stand-alone purpose built office towers and a few form part of a mixed development project. 50% of the new supply will be located in the Golden Triangle Area and are purely driven by private initiatives.

“Meanwhile, KL Metropolis, KLIFD and KL Sentral are Government initiatives, with strong synergies with the private sector, to propel Kuala Lumpur towards world class status. Prime components will be office space supported by retail, serviced apartments, hotels and a convention centre,” it says.

With total gross development value of RM15bil, KL Metropolis covers a total land area of 75.5 acres located near Matrade Jalan Duta. The key development component (apart from ratail, hotels and apartments) is the 1.07 million sq ft convention centre which aims to strengthen Kuala Lumpur as the preferred meeting, incentive, convention and exhibition destination over its regional competitors that include Singapore and Guangzhou.

“KLIFD is another national mega-project located near Imbi area fronting Jalan Tun Razak. This 75 acres integrated mixed development project aims to establish Kuala Lumpur as the regional financial centre.

KL Sentral, on the other hand, is a world class transportation hub valued at RM8bil and has been divided into 14 land parcels, each representing a different function. Some of these lots have been fully developed and are already in use, while others remain under construction or are still waiting for work to commence,” it says.

Upon completion, KL Sentral will comprise Stesen Sentral, corporate office towers and business suites, five-star international hotels, luxury condominiums, a retail mall, services apartments and, an international entertainment and exhibition centre.

The opening of The Hilton and Le Meridien hotels in September and October 2004 respectively has added a new dimension to KL, providing a myriad of prestigious lifestyle amenities at an international level.

By 2015, a total of approximately 6.3 million sq ft of office space will be available within KL Sentral. “In general, we are in the opinion that these mega-projects will act as a development catalyst which will then help to spur growth in the immediate locality. For instance, Brickfields enjoys a spill over effect from KL Sentral,” it says.

Over the last eight years, the profile of Brickfields has slowly morphed and there has been hardly any new land in Brickfields for further development over the last several years. Property prices there have shot up after KL Sentral opened in 2001 and have been going up steadily over the years. A 4-storey shoplot, with good frontage and in good condition, that was sold for RM1.7mil in 2002 can now command around RM2.8mil. The rent of a ground-floor space can go up to RM10,000 a month while the upper floors can command RM1,500 to RM2,000 a month.

“We believe KLIFD will eventually change the landscape of its surroundings. The prime challenge will be to establish the anchor tenant of the office tower. For instance, the establishment of Petronas in KLCC has raised the demand for office space surrounding KLCC which is mainly generated by oil and gas related companies. Similarly, KLIFD will need to identify the anchor tenant that will help to augur growth in its surrounding areas. In general, with more office space, more office population will be attracted. With higher influx of professionals, both local and international, demand for other components such as serviced apartments and retail will increase accordingly,” says the property consultant.

Connectivity to a rail network is also pertinent in ensuring the success of these mega-projects. It is learnt that KL Sentral and KLIFD will be connected to the proposed MRT line.

“This transit-oriented development will eventually create a new development corridor along the rail line similar to the Rossyln-Ballston Corridor in Arlington, Virginia served by Washington Metro Line and Burnaby, Vancouver served by Sky Train line. Upon completion of KLIFD, the surrounding areas which are currently occupied primarily by old retail businesses and offices will be transformed into a more modern, vibrant and liveable area,” says Rahim & Co.

Meanwhile, the development of KL Metropolis will help to disperse the concentration of office space to the outskirts of the Kuala Lumpur city centre.

Generally, it will be similar to Mid Valley City as being a self contained integrated commercial centre outside the city centre. While Mid Valley City is acting as the southern Kuala Lumpur commercial hub serving areas such as Bangsar, Seputeh, and Petaling Jaya, KL Metropolis will function as the northern Kuala Lumpur commercial hub with prime coverage areas including Mont Kiara, Damansara Heights and Sentul. The availability of a major convention centre will position the locality as an international trade and exhibition district in Kuala Lumpur.

“Notwithstanding the fact that these mega-projects will bring a positive impact to the nation's economy, we still need to be cautiously optimistic on its success. As these projects are highly dependent on private investments, both local and international, the uncertainty in the global economy may pose investment worries,” it says.

In addition, there has been a trend developing. Companies are shifting their operations outside the city centredue to bad traffic and higher operating costs in the city. Companies are also drawn to the larger and modern office space on offer in buildings outside the city area .Petaling Jaya is currently the focal point of new supply of office space and has gradually seen a higher influx of multi-national companies.

Property consultancy CB Richard Ellis (M) Sdn Bhd says the Klang Valley will face an oversupply of office and retail space within the next two to three years while capital values for residential units would see some increases in 2012, but at slower rates compared with the past 18 months.

Its executive chairman Christopher Boyd, in a recent briefing, says that while 2011 is a strong year in terms of demand for office space in the Klang Valley, rental values might succumb to the oversupply within the next 18 months.

The total office space supply in the Klang Valley stands at 80.8 million sq ft at the end of the first half of 2011 (compared with 80 million sq ft at the end of 2010).

However, Boyd says it is estimated that an additional 25 million sq ft of office space will come on stream in the Klang Valley by 2015 (excluding mega projects such as the Naza group's KL Metropolis development and the KLIFD).

He says that vacancy rates in Kuala Lumpur are under 13% and though this is not an alarming number, the vacancy rates are expected to increase in tandem with supply.

A report by CB Richard Ellis notes that prime gross asking rentals were flat at RM7 per sq ft with only a handful of buildings above this level.

Since rising steadily from 2002 to 2008, rentals at top city centre buildings have remained mostly flat for the past two years.

Boyd says recent average transaction prices of Grade A office space generally ranges between RM800 and RM900 per sq ft. However, there are higher prices than these being achieved in the market like the RM1,100 per sq ft or more in KL Sentral and SP Setia Bhd's KL Eco City.

By The Star

Ivory and Dijaya to develop RM10bil mixed project in Penang

Penang Development Corp general manager Datuk Rosli Jaafar (left) exchanging documents with Datuk Low Eng Hock. With them are Lim Guan Eng and State Economic Planning Unit deputy director Hafidzah Hassan.

GEORGE TOWN: Tropicana Ivory Sdn Bhd (TISB) is investing RM10bil in a mixed residential and commercial property project on a 102.56 acre site in Bayan Mutiara, Penang.

TISB is a 51:49 joint venture between Ivory Properties Group Bhd and Dijaya Corp Bhd.

Ivory Properties chairman and chief executive Datuk Low Eng Hock said the development covered 102.56 acres, of which 67.56 acres comprised existing land and 35 acres were to be reclaimed.

“The plan for Penang World City is to develop a mix of residential units, shopping mall, office suites, office tower, hotel, retail spaces and open mall with boulevard.

“The development will be completed in eight years and work on the first phase is scheduled to begin next year,” he said.

The land is strategically located within Bayan Mutiara, a new development hub in the eastern part of the Tun Dr Lim Chong Eu Expressway and in the vicinity of Sungai Nibong.

Low said this at the signing of the purchase and development agreement between Chief Minister of Penang (Inc), Penang Development Corp and Ivory Properties. Penang Chief Minister Lim Guan Eng witnessed the ceremony.

Ivory Properties is proposing a renounceable rights issue of 186,000,000 new ordinary shares of 50 sen each together with 186,000,000 new free detachable warrants to pay for the land and the development of the project.

Ivory Properties has to pay 10% as downpayment of the RM1.07bil sale price for the land. It has paid 2%, with the remaining 8% to be paid within 90 days after the signing of the purchase and development agreement.

On the development concept, Ivory Properties operation director Murly Manokharan said the emphasis of the project would be on green buildings, green township and a healthy lifestyle within its community.

“We have proposed for pedestrian network and bicycle tracks connecting to almost each and every building to reduce carbon emission within the township,” he said.

Murly added that there was a proposal for a museum, a landscaped outdoor amphitheatre and educational interactive facilities, providing state-of-the-art entertainment for all, he said.

By The Star

Dijaya, Ivory team up

Dijaya Corp Bhd and Ivory Properties Group Bhd will jointly develop a land in Penang that could generate RM10 billion in gross development value.

The project in Bayan Mutiara, Penang, will be undertaken by a joint-venture company called Tropicana Ivory Sdn Bhd (TISB).

Dijaya will hold 49 per cent of TISB, while Ivory Properties will have the remaining 51 per cent.

The development covers 41ha of land, of which 27ha is existing land. Another 5.6ha will be reclaimed.

The land is being bought for RM1.07 billion. It will be converted into a mix of residential, shopping mall, hotel, office suites, office towers, retail spaces and open mall with boulevard.

It will also include construction of Grade A offices and a specialist medical centre if needed.

The development will be completed over the next eight years and work on the first phase is scheduled to begin next year.

Under the deal signed yesterday, Dijaya will extend financial assistance to TISB in the form of shareholders advances, guarantee, indemnity or collateral of up to RM525.4 million or 49 per cent of the total consideration of the development land.

Ivory Properties may also provide financial assistance of RM482.5 million for the same purpose.

The first tranche of the RM1.07 billion land purchase will be funded through internally generated funds by Ivory and Dijaya.

Subsequent payments will be funded through a mix of internally generated funds and/or bank borrowings.

By Business Times

Pavilion REIT eyes RM710m IPO

KUALA LUMPUR Pavilion Real Estate Investment Trust (REIT) aims to raise up to RM710 million in an initial public offering (IPO), which would be the fourth largest listing in the country this year.

The company will offer 790 million shares at an indicative price of 88-90 sen per share, according to the IPO term sheet obtained by Reuters.

Last month, Reuters reported that the IPO would raise about RM700 million, making it the fourth largest in Malaysia this year after Bumi Armada Bhd, MSM Malaysia Holdings Bhd and UOA Development Bhd.

The proceeds would be used for working capital and for partial payment of acquisitions, according to the information sheet. CIMB, Credit Suisse and Maybank are the joint global bookrunners for the deal.

The Employees Provident Fund and Kumpulan Wang Persaraan and insurance companies Great Eastern Life and American International Assurance Bhd are among those roped in as cornerstone investors for the IPO.

By Business Times

Iskandar draws RM600mil investment for Medini township

PETALING JAYA: Iskandar Investment Bhd's flagship development Medini in Iskandar Malaysia has attracted property developer Darul Tinggi Sdn Bhd to invest in a project with a gross development value of RM600mil.

This project is secured one week after Medini secured investments from Beijing-based property developer Zhuoda Group.

With the signing of a shareholders and subscription agreement and a development and lease purchase agreement between Iskandar's wholly owned unit Medini Land Sdn Bhd and Darul Tinggi, both parties had agreed to set up a joint-venture company for the development of a high-rise mid-premium condominium in Medini, said Iskandar in a statement.

The joint-venture company. Distinctive Resources Sdn Bhd, will be 80% owned by Darul Tinggi and 20% by Medini Land.

Iskandar said the residential enclave was designed to be a contemporary lifestyle development and would be implemented in two phases.

Construction work for Phase 1 involving 351 condominium units is scheduled to take place in May, 2012.

The second phase comprising the remaining 334 condominium units is expected to take place 20 months upon completion of the first phase.

By The Star

SP Setia Australian venture pays off

Last Monday, Franklin Street in Melbourne was abuzz as kompang players and lion dancers readied themselves at the entrance to SP Setia Bhd’s new sales gallery.

Malaysia’s biggest property developer launched its Fulton Lane property that morning, which is presently just an empty parking lot across the street, but by 2014 will be home to two high-rise apartments.

If the turnout was any indication, buyer interest is intact. Corporate-types and well-heeled guests packed the gallery showcasing SP Setia’s maiden venture into Australia.

With this property, the developer is hoping to attract those who seek proximity to Melbourne’s many amenities; Queen Victoria market, RMIT and La Trobe University are some of the places in walking distance to it.

Sandwiched between two streets, the one-acre, A$470mil gross development value project will comprise a 29-storey tower facing Franklin Street with 291 apartment units, and a 45-storey tower facing A’Beckett Street with 409 units. Connecting the two blocks is a retail podium that rises to nine levels. SP Setia president and CEO Tan Sri Liew Kee Sin says the first tower has sold about 80% of its lots and the second tower, the taller of the two, about 30%.

The first tower was bought by mostly Malaysians – at its preview sale a few months ago, 70% was snapped up within three days. The second tower is targeted at local Australian buyers as well as those from Indonesia, Singapore, Brunei, and Hong Kong. In a few weeks, SP Setia will head to China to market it there. Buyers for the first tower are investors and owner-occupiers while the second tower will primarily be owner-occupiers.

The project is expected to fetch a margin of 20%, comparable to developments in other major cities in emerging markets.

Fulton Lane’s apartments, which come with one, two and three-bedrooms, start from A$365,000. Facilities include a garden terrace, gymnasium, indoor heated lap pool, a lounge cum reading room, two areas for barbecue, and a theatrette.

The “lane” in its name is not accidental – SP Setia plans to create a lane between Franklin and A’Beckett Street to mimic Melbourne’s “laneway culture”.

And no wonder - the city’s lanes and alleys are its claim to fame, where tourists and locals flock to savour Melbourne’s coffee and cuisine.

SP Setia’s venture into Australia has also enabled it to pick up on that market’s best practices, Liew says. For one, environmental sustainability is a prime concern there, and being a developed country, Australia also operates more transparently.

This, Liew points out, is something SP Setia can learn from.

But even as Australia prospers from a mining boom, there is relentless talk of oversupply in the housing market.

The Australian Bureau of Statistics recently released data showing that new construction of apartments in Victoria for the March quarter this year hit 5,168, the second highest on record. Similarly, a report out last week from the Housing Industry Association found that new home sales were down 14% in the third quarter, and suggested the drop in house prices may accelerate.

CB Richard Ellis (M) Sdn Bhd executive director Paul Khong says Melbourne’s property market is currently “toppish” due to the supply from various new projects.

“It has been a popular destination for foreign buyers investing in Australia especially for education purposes, but the prices have already moved up quite a bit over the last 24 months,” he tells StarBizWeek.

“We expect residential prices in Melbourne to be flattish and do not see any drastic oversupply that may cause a major dip in capital values.

“We expect capital values to stabilise as we see good support on the tenancy side,” he says, adding that residential yield is about 4% to 5% and anticipated to stay at that level.

Nonetheless, Melbourne is widely acknowledged as Australia’s fastest growing city, its population boosted by students and emigrants.

The State Australian Cities report by an Australian ministry says the population in Melbourne grew by 605,000 to 4.077 million over the past 10 years and is projected to rise to five million by 2027 at the current growth rate.

SP Setia is probably hoping for that outcome as it is in the midst of planning for an upcoming project in South Yarra, also in Melbourne, which sits on 2.23 acres and may accommodate up to 329 apartments.

A property analyst thinks that Fulton Lane can count as SP Setia’s first successful foray overseas.

“Their project in Vietnam is not making money, the Singapore one has yet to take off, and they’ve given up on the China joint-venture. So it (Fulton Lane) is good news,” he says.

By The Star

TTDI the first township to gain from Safe City programme

GOING around Taman Tun Dr Ismail, one would notice the number of changes that has taken place over the past months.

The township is the first to enjoy the benefits of the Safe City programme under the National Key Results Area (NKRA).

Housing and Local Government Minister Datuk Seri Chor Chee Heung had set aside a budget of RM1.45mil for the scheme implemented in TTDI in October.

TTDI Residents Association chairman Mohd Hatim Abdullah said most of the features installed in the neighbourhood were requested by the residents.


Finer details: A worker repairing the damaged fencing along the playground.

Hatim said the residents wanted the Government to install railings along walkways, safety mirrors and closed circuit cameras.

He said they were happy that their area was chosen for the pilot project.

He added that there were about 30 crime cases a month in TTDI involving house burgalry, car break-ins and snatch thefts.

So far, Kuala Lumpur City Hall (DBKL) has installed seven safety mirrors at the commercial area in TTDI to help curb crime.

Safety mirrors can been at the backlanes of Jalan Aminuddin Baki and Jalan Burhanuddin Helmi especially for pedestrians to look out for suspicious characters in the alley.

Three emergency hotline notice boards were also put up in Jalan Burhanuddin Helmi, Jalan Tun Mohd Fuad and Jalan Dato’ Sulaiman.

Railings to enable pedestrians to walk along the pathway without fear have also been put up along Jalan Burhanuddin Helmi.

“We had also requested for a perimeter fence made of galvanised steel at the border of TTDI and Kampung Sungai Penchala, however, due to budget constraints a chain link fence is being erected,” added Hatim.

According to him, residents have been waiting for a fence for about 15 years as the roads heading into TTDI near Lorong Rahim Kajai 5 would be crowded during peak hours.

Some of the residents also proposed that the playgrounds in TTDI be lighted up to deter youngsters from hanging out and indulging in bad habits.


Protected: Railings are installed along Jalan Burhanuddin Helmi to enable pedestrians to walk along the pathway without fear of being robbed by motorcyclists. There is also a sign bearing emergency numbers.

So far the playgrounds in Lorong Rahim Kajai 4 and Lorong Burhanuddin 8 have been fitted with streetlights.

Several hotspots will have new streetlights with 250watts compared with the 100watts now.

Hatim said they were waiting for all their other requests to be fulfilled before the NKRA sent another feedback form to gather the residents’ opinion.

“We have informed all the residents that we are working closely with the Government and DBKL and are looking forward to getting the approval for a gated and guarded community,” he said.

TTDI has long since requested for a gated and guarded community, however, the Government needed 80% of residents’ consent to do so.

Hatim said they had the consent of 60% of the residents now.

Hatim said they would continue to work with the government until the residents feel that TTDI had become a safe township.

By The Star

Make city living enticing

The heavy traffic leading into Kuala Lumpur in the morning and out of the city in the evening may be acommon sight, but there are a number of lessons that can be learned from it.

I'm sure many of us would ask why people who work in the city can't just stay in the city as then there would not be such a massive flow of traffic.

This daily occurrence on roads leading into the city and those within the city congests the city in the day time, and by night the town becomes quiet again, and this is a telling sign that Klang Valley folks have not embraced the concept of city living.

It is worth finding out why the capital city is still not popular as a residential address.

Instead of opting for the convenience of living in the city and avoiding the hassle of having to brave those heavily congested roads on a daily basis, many have chosen to stay in the suburban areas.

Although many of them may be feeling quite overwhelmed by now, they have little choice but to put up with the daily “pilgrimage” on a daily basis just to get to their work place.

The way our cities and towns have been planned certainly has something to do with it, and it looks like we can do with some tweaking and re-planning to turn our cities around to become lesser of a dilemmaand more friendly to city folks and road users.

Our town planners should learn from the current inadequacies and shortcomings that are plaguing our cities, and it is still not too late to make amends and attend to those.

Identifying the prevailing shortcomings that have rendered city living unappealing for many Klang Valley folks will provide the necessary solutions.

One of the obvious reasons is a lack of affordable housing and community living projects in the inner city.

Many would not mind owning a house in the city if there are more residences that have an average built-up of 1,000 sq ft to 2,000 sq ft, and are priced between RM300,000 to RM500,000.

But sadly, most of the housing units are quite sizeable from 2,000 sq ft to more than 10,000 sq ft and of course these are tagged at nothing less than RM1mil a unit making them far from affordable.

For this reason, many of those working in the city centre have little choice but to brave the daily jams. There is also a large number among them who commute from as far as Bentong, Nilai and Seremban.

But for many, living in the suburbs also means they have the luxury of choosing from a wider range of housing options at lower prices, while city living usually equates to a higher cost of living.

To address the issue of cost, which developers usually attribute to the high cost of land and construction materials, the redevelopment plans for the Sungai Besi airport and other Government land (Jalan Cochrane and the 3,300 acre Rubber Research Institute in Sungei Buloh) should have a larger ratio of residential component versus commercial property.

There is still an over supply of commercial property, including office space, in the capital city, and priority should be given to increase the number of residential units in those projects to meet demand.

Developers should also look into adopting newer technology and construction methods and materials that have higher quality and durability at lower cost.

If we look around, there are many old buildings that are deplorable and have been vacant for many years, and it will be a great idea to restore these buildings and give them a new lease of life.

We can take a cue from Singapore's Urban Redevelopment Authority (URA) as it goes about redeveloping the city state's old buildings by offering them up for redevelopment through open tenders.

As a one-stop agency, the URA will invite developers to bid through open tenders and submit their plans for the redevelopment process.

The selection of the successful tender will be based on a set of pre-determined criteria, which besides costing, includes the ability of the project to add value to the people's living, working and recreational space.

Likewise, there are also many opportunities for the dilapidated parts of our city to be revived and for some of the older and idle commercial buildings and assets to be torn down and rebuilt into residences.

In the planning process, it is important to retain a healthy balance between the built and unbuilt by retaining some parts of the natural environment as green lungs and parks.

Open space is important for people to unwind and take a breather from the hustle and bustle of city life and to promote a happier and healthier populace.

Deputy news editor Angie Ng believes KL city folks deserve to have at least another two public parks (in the likes of London's Hyde Park) to walk about.

By The Star

No loss occurred over Talam takeover

The Selangor Government hopes to make RM1.2bil after taking over Talam Corporation two years ago.

Mentri Besar Tan Sri Khalid Ibrahim said the acquired plots of land were in Kuala Langat, Kuala Selangor and Hulu Selangor.

“They are from projects in Bukit Beruntung, Bestari Jaya and Canal City,’’ he said in reply to a question from Datuk Mohammad Bushro Mat Johor (BN-Paya Jaras).

Khalid said the state had also cashed out RM50mil earlier by taking over Talam.

He said the state had obtained bank loans as part of its efforts in paying off debts owed by Talam to some companies.

“We incurred a total cost of RM391mil from the takeover bid.

‘’We have been successful in taking back the plots of land that have been given to cronies.

“We have returned the land to the people of Selangor with the opportunity of making RM1.2bil from the land value alone,’’ he said.

Khalid said a book would be released on how the reconciliation exercise was done.

He also said there was an exhibition on the exercise at the state secretariat in Shah Alam recently.

By The Star

S'pore billionaire to buy 10ha from Johor royal family

PETALING JAYA: Singapore billionaire Peter Lim, dubbed the “Remisier King”, has signed a deal with the Johor royal family to acquire 10ha in Johor for the development of a medical hub and a marina city.


Lim wants to develop the 10ha into a medical hub and marina city.

The joint venture company behind the development is Best Blend Sdn Bhd, which Lim owns 70%, and the royal family owns 30%. Lim is ranked by Forbes business magazine as Singapore's eighth wealthiest individual with a fortune of S$1.8bil.

“The cost of the medical hub is estimated at S$200mil and the total development cost could range from S$1bil to S$2bil. The medical hub will be funded through a mixture of debt and equity,” said Koh Kim Huat, a director of Best Blend.

The hospital, when completed, will be managed by Thomson International Health Services, the consultancy and management division of Thomson Medical Pte Ltd.

Singapore-listed Thomson Medical was taken private by Lim last year. It is described as a leading healthcare service provider in Singapore for obstetrics, gynaecology and paediatric service.

The site of this hub is located at Bandar Johor Baru, and is within close proximity to Johor's new royal customs, immigration and quarantine complex as well as Singapore's Woodlands checkpoint.

The first phase of the project will see the construction of a medical hub which will include a private hospital and healthcare-related facilities and also supporting facilities including serviced apartments, a mega shopping mall and a mega fully secured car park. A special feature of the complex is a state-of-the-art security deterrence and detection systems.

The 200-bed general hospital will house centres of excellence for diabetes, orthopaedics, ophthalmology, women's health, and a state-of-the-art day surgery centre.

“The medical hub will provide quality private healthcare at affordable prices to Singaporeans and Malaysians,” said Koh.

When asked whether TMC Life Sciences would be involved in the medical hub, Koh said there were no plans at this point.

Lim made headlines in Malaysia last year when he bought a substantial stake in TMC Life Sciences Bhd, a private healthcare group which is popular for its fertility treatments. Lim is now the largest shareholder of TMC with 32.59% stake.

Koh said fertility would be one of the key focus segments of the hospital. Among others, the focus for the hub will be the treatment of chronic and lifestyle diseases associated with growing affluence and which afflicts increasing numbers of Malaysians. The hub aims to provide a one-stop centre for chronic disease management of diabetic patients. A training school will be set up for nurses and medical technicians.

By The Star

Sime to unveil E&O plan soon

KUALA LUMPUR Sime Darby Bhd, which bought a 30 per cent stake in Eastern & Oriental Bhd (E&O), will unveil its potential collaboration with the property developer on November 25.

Sime president and group chief executive Datuk Mohd Bakke Salleh said more details would be known on that day, which is also the day that Sime will announce its first quarter results ended September.

"We will announce the E&O collaboration, outlook for the next financial year as well as Sime's 2012 KPI (Key Performance Index) target on November 25," Bakke said after its annual shareholders meeting.

Sime bought the 30 per cent stake in the Penang-based property developer for RM766 million in August. The conglomerate, however, has not nominated any board representation in E&O, even though it has management control.

"No plans yet on board representation but the directors will have to go through the process."

Bakke said Sime also had no plans to increase its stake in E&O.

By Business Times

Sentul medium-cost flats to be built under Govt programme

PETALING JAYA: Melati Ehsan Holdings Bhd will design and build medium-cost flats in the vicinity of Sentul, after clinching a RM297mil contract from the Government.

In unveiling the location of the project, a source revealed that the company would embark on the project on two separate parcels of land in the area, which would ultimately see more residences being supplied to cater to the growing demand in Kuala Lumpur city and its surrounding area.

The company had announced earlier that it had won the contract to build residential flats for the Housing and Local Government Ministry's People's Housing Programme (PPR), without revealing further details.

“It (Melati Ehsan) will be tasked with the design and building of the flats, while the authorities are still responsible for selling and distributing the units,” the source said.

According to the source, the two pieces of land are currently occupied by squatters, and it would be a resettlement plan (for the people staying there) and the project would provide new residences for eager homeowners.

The company said the contract had been awarded to its wholly-owned subsidiary, Pembinaan Kery Sdn Bhd, and that it had just received the letter of award.

It said the contract would be split into two portions: one part is valued at RM82.1mil for the provision of 500 units of flats, and the other is for 1,600 units of flats worth RM215.9mil.

The flats will probably be sold for between RM135,000 and RM164,000 each. They are expected to be completed earliest by 2014, assuming the construction of the 500 and 1,600 units are completed on schedule by 30 and 36 months respectively.

If the flats are sold at the expected prices, they will be categorised as medium-cost flats, which suggests the units will have better design and built-up than the low-cost flats in previous PPR projects.

The source said compared with the old PPR flats, which only provided one parking space for every four units, the new flats would have one parking lot for each unit.

Meanwhile, Melati Ehsan is also busy with a RM1.62bil joint property development project with the Selangor State Development Authority in Kelana Jaya, where it is redeveloping the PKNS Sports Complex.

The 30-year old complex, which includes a field, six tennis courts and a clubhouse, will most likely make way for a sports-themed mixed development with five 35-storey apartment blocks, two 15-storey business complexes, a performing arts centre and an integrated sporting hub.

By The Star

Stylish Bukit Bayu bungalows in Shah Alam designed for growing families

Cosy: A bedroom in the bungalow.

Large families will testify to the fact that even the most spacious-looking home can fail to meet expectations when they eventually move in with their belongings.

Years go by, and it becomes apparent that life would be easier with an extra bathroom here and another bedroom there. And the children will chime in that an added play area would be just great, too.

Bukit Bayu in Section U10 in Shah Alam, nestled next to the Bukit Cherakah Forest Reserve, is everything a family needs as they grow together.

Luxurious five- to six-bedroom bungalows are being built with a children’s retreat and lots of storage space.

Only 133 bungalows are being built by Melati Ehsan Holdings Berhad in two phases and the development will see 65 units completed in the first phase while the remainder will be in phase two.

Melati Ehsan managing director Tan Sri Yap Suan Chee said besides being spacious, Bukit Bayu bungalows were stylish.

“First impressions are important, once inside the main door.

“You will be immediately captivated by the breadth and height, all of which are enhanced by the sweep of a stairway with huge windows that stream in natural lighting,” he said.

He added that the formal living and dining area was an open plan and light-filled, with windows covering almost one wall in the dining room.

Executive director Datuk Tan Hong Ming said in the kitchen, there was space to incorporate a large U-shaped island bench so that a cook could actually serve meals for even the largest gathering of family and friends.

“Storage is also a design priority here, and owners should have no problem accommodating a twin- door refrigerator, an array of built-in cupboards and even a walk-in pantry,” he said.

After the launch of Bukit Bayu by Shah Alam mayor Datuk Mohd Jaafar Mohd Atan recently, reporters were taken on a tour of the show units where up the staircases were five roomy bedrooms.

On the first floor is another family area and five bedrooms. The master bedroom is actually a suite. It has space for two large walk-in wardrobes and a spacious attached bedroom.

In fact, the bathroom is so large its various functions can be physically segregated.

In one portion, a toilet and bidet can be installed, while another part can be used as a shower room.

Other rooms have been styled with practicality in mind.

Yap said Bukit Bayu was a person’s passport to a life enriched by the beauty of nature as the neighbouring forest offered refreshingly crisp, cool air .

Owners of the bungalows will have a guarded concept and enjoy the luxurious clubhouse that has a swimming pool and multipurpose hall.

By The Star

Extreme Equatorial makeover?

Kuala Lumpur: Hotel Equatorial Kuala Lumpur may be torn down under an extreme makeover, reflecting rising competition among hotels as Malaysia's tourism industry grows.

It could also mean that the 38-year-old hotel will be the fourth structure along the busy Jalan Sultan Ismail to be earmarked for rebuilding.

Malaysia wants to triple tourism receipts to RM168 billion in 2020 from last year's figure of RM56.5 billion by attracting 46 per cent more visitors.

Hotel Equatorial will close from April 1 2012.

It is understood that the hotel management had informed its staff a few weeks ago on its plans to temporarily cease operations from March 31 2012.

"We are intending to do a major upgrading exercise that will involve the closure of the hotel," said its general manager Alan Ong.

"The hotel was built and designed for the 1960s and today there is a need to upgrade. (In order) to stay relevant in the business, we have to do the upgrading," Ong said.

Equatorial KL, which opened for business in 1973, was last renovated some eight years ago.

The hotel has a room inventory of 275 and sits on a land covering close to 85,000 sq ft, which according to industry estimates is worth as much as RM250 million.

Hotels have to regularly undergo renovation and refurbishment exercise in order to remain competitive in the market.

Competition is expected to be stiff, with several new hotel openings and extensions announced in the Kuala Lumpur city centre including Grand Hyatt, Impiana KLCC and the Banyan Tree Signatures.

Meanwhile, Ong was unable to say how long the hotel will be closed for upgrading works.

According to sources, it could take up to three years before the hotel will be able to open for business, as there are plans to tear down the building.

Messages left by Business Times at Equatorial KL's corporate office to obtain details on the project were left unreturned.

Nevertheless, a search on the Internet revealed that the owners had submitted and obtained approval as early as last year from Kuala Lumpur City Hall for the proposed makeover.

In February 2011, Business Times quoted Tradewinds Corp Bhd's chairman Tan Sri Megat Najmuddin Megat Khas as saying, "TCB plans to demolish both Komplex Antarabangsa and Crowne Plaza Mutiara Hotel to make way for a new property project".

In September 2011, Kuala Lumpur mayor Tan Sri Ahmad Fuad Ismail said TCB had been granted a development order for Hotel Istana, which is located at the corner of Jalan Sultan Ismail and Jalan Raja Chulan.

However, as at press time, it is still unclear when these buildings will be demolished.

Hotel Equatorial's website states it is located in three major Asia Pacific countries with seven properties in the group.

In Malaysia, the Equatorial hotels are in Penang, Cameron Highlands, Bangi and Malacca.

The properties abroad are in Shanghai, China and Ho Chi Minh in Vietnam.

By Business Times

MRCB plans to build affordable homes: CEO

Malaysian Resources Corporation Bhd plans to build affordable houses in one of its projects to serve the medium-income populace, its chief executive officer Datuk Mohamed Razeek Hussain said today.

He said his property development and investment company supported the government's Projek Perumahan Rumah 1Malaysia as it was an excellent way to help the people who have not achieved the requisite income level to buy high-value properties.

"We are supportive of the housing scheme and plan to include such houses in one of our projects soon. We hope to get approval and assistance from the government," he told reporters after the company's corporate social responsibility event themed

"Promoting Intelligence, Nurturing Talent, Advocating Responsibility" here today.

On another note, Mohamed Razeek said the group had done the soft launch for its two blocks of condominiums at Kuala Lumpur Sentral.

Known as "The Sentral Residences", the project received good public response.

"We've almost sold all the units on the first block and when we opened the second block (for booking), it was a brisk sale," he added.

By Bernama

Companies eyeing job to sell BRDB’s assets

PETALING JAYA: Bandar Raya Developments Bhd (BRDB) has yet to make a decision on the appointment of consultant for the sale of its prime assets but industry sources said companies such as Jones Lang Wootton Malaysia, DTZ and Knight Frank Malaysia could be eyeing the job.

BRDB had on Sept 26 that it would hire an independent international property valuation firm to conduct a tender exercise for the sale of BR Property Holdings Sdn Bhd, which owns the successful Bangsar Shopping Centre and Menara BRDB as well as CapSquare Retail Centre and the Permas Jusco Mall.

This came about after calls urging the company to do so after Ambang Sehati, BRDB's major shareholder with an 18.88% stake, had proposed to buy the prime assets for RM914mil.

Ambang Sehati, the investment vehicle of BRDB chairman Datuk Moiz Jabir Mohamed Ali Moiz, would also be invited to participate in the tender exercise.

BRDB has yet to reply to queries by StarBiz on further developments regarding the tender exercise.

It is also unclear whether the property valuation firm would be appointed directly or after a RFP (request for proposal) to property consultancies.

Sources told StarBiz that the decision might be made at the next BRDB board meeting, of which a date has not been fixed.

Property consultancies contacted by StarBiz said they had not heard of any RFPs from BRDB or further developments regarding the tender exercise.

“BRDB has been very quiet on this matter,” noted one consultant.

By The Star

SPNB to take over Oriental Village?

GEORGE TOWN: Syarikat Prasarana Negara Bhd (SPNB) is in talks with the Langkawi Development Authority (Lada) to take over the operations of the Oriental Village in Teluk Burau on the resort island.

Business Times has learnt that talks on the prospect began last year and a due diligence is ongoing.

Sources said that by taking over the management of the Oriental Village from asset owner Lada, SPNB will be able to promote a greater value-add for its cable car operation, which is located within the Oriental Village compound.

Panorama Langkawi Sdn Bhd (PLSB), a unit of SPNB, operates the cable car service that was introduced in 2003. Its base station is sited within the village.

PLSB chief operating officer Eby Azly Abdullah when contacted, confirmed that the company is in talks with Lada.

"We are talking to Lada on several options," he said, adding that one option could entail profit-sharing with the asset owner.

The Oriental Village, featuring some 50 retail outlets and located at the foothills of Bukit Machinchang, is one of several properties currently managed by Lada's wholly-owned Lada Eco-Tourism Sdn Bhd.

The company also oversees the development and management of the Geopark Hotel Langkawi and Mutiara Burau Bay Resort in Teluk Burau.

In recent times, the condition of the shops at Oriental Village has been a sorry sight for tourists visiting the area.

Apart from having merchandise in most shops that mirror each other, the quality of the goods reportedly have been inferior.

By Business Times

Retailers can bid for KLIA2 space next year

SEPANG: Retailers interested to be part of the new KLIA2, slated to be open end of 2012, can bid for space through two open tenders next month and February next year.

Malaysia Airports Holdings Bhd (MAHB) senior general manager of commercial services Faizah Khairuddin said the tenders would be placed on MAHB website and major newpapers in early December and another one on February 15.

The tender for next month will be open from December 5 to 9.

"We will have the first batch in December and hope to get at least 20 to 30 per cent of the retailers then. The next one will be open in February after Chap Goh Meng celebrations," she said at a press conference after a preview on KLIA2 retail space here, yesterday.

Faizah said KLIA2 will not automatically take in the retailers from the present low cost carrier terminal.

"These retailers would also have to go through the open tender process like the rest," she said.

According to her, the tendering process will be done in two batches because of the holidays in between, including New Year and Chinese New Year.

The bidding process would take between four to six weeks.

"May the best man win and in this case, companies that are outcome-driven would likely be given a chance," she said.

Faizah said the whole tendering process would be completed next July, just in time for the airport's opening, scheduled by the end of next year.

The overall retail space up for grabs at the KLIA2 is 225 outlets with a total of 35200 sq m space.

One operator is allowed not more than five oulets.

"Out of this space, 95 per cent would be for commercial purposes while the rest for upcoming small and medium enterprises," she said.

On the commercial side, Faizah said 50 per cent would be for retail, 40 per cent for food and beverages, and the rest for services.

Retailers interested to bid for the retail space at the new airport, can can go to www.malaysiaairports.com.my or www.klia2.com.my.

By Business Times

IOI unit, Pertama Land end land deal

IOI Corp Bhd’s subsidiary Sri Mayvin Plantation Sdn Bhd and Pertama Land & Development Sdn Bhd have mutually agreed to back out of a sale and purchase agreement that was earlier disputed.

Pertama Land had, vide its letter dated October 25 2011, disputed Sri Mayvin’s termination of the SPA on October 25 2011.

Sri Mayvin had initially agreed to buy 11.9ha of oil plantation land from Pertama Land for RM830 million.

The former terminated the deal with Pertama Land, however, saying that it (Pertama Land) had failed to upkeep and maintain its properties, besides there being discrepancies relating to the properties.

Sri Mayvin will be refunded the RM83million deposit it had put up.

By Business Times

Glomac business booms despite global slowdown

CYBERJAYA: Glomac Bhd, unfazed by the slowdown in global economy, will continue to expand its property development activities in Malaysia.

The company is looking to increase its projects in hand to improve earnings, said its assistant general manager, group corporate communication and marketing, Fara Eliza FD Mansor.

As at July 31, Glomac has a net cash position of RM361.6 million.

"We are increasing our landbank size and plan to launch more medium- to high-end developments. We will go where the market is," she told Business Times in an interview recently.



The company has close to 405 hectares in its pocket with a potential to develop properties worth RM3.8 billion over the next seven years.

Glomac's net profit rose 14.7 per cent to RM17.9 million in the first quarter ended July 31, mainly attributed to strong contribution from previous and ongoing projects.

Revenue for the quarter surged to RM127.83 million, from RM126.31 million a year ago.

Glomac is currently focusing on four projects, namely Glomac Damansara, Mutiara Damansara Residences and Glomac Utama in Petaling Jaya, Selangor, and Glomac Cyberjaya. The projects are worth close to RM2 billion combined.

While the RM1 billion Glomac Damansara has started, the company is aiming to launch the RM250 million Mutiara Damansara Residences and RM400 million Glomac Utama by the end of this year or in early 2012.

For Glomac Cyberjaya, the company is now introducing phase two, comprising 55 units of three to 41/2-storey shop offices worth RM250 million.

"Phase 1, consisting of 63 units of shop offices, was sold out within six months. There is still a lot of demand for the properties," Fara said.

She said the limelight for 2012 will be a yet-to-be-named project in Puchong, comprising mainly residential, valued at around RM1 billion.

"That will be our next flagship project after Glomac Damansara," Fara said.

Glomac had acquired 80ha of leasehold land in Bandar Metro Puchong for RM77 million this year to undertake the development.

By Business Times

MB: We will start affordable home project soon

Deplorable: The dilapidated longhouses in PJS1 near Old Klang Road is located on a rubbish-dumping ground. There is also a drain which has been clogged and now a mosquito-breeding ground.

SELANGOR Mentri Besar Tan Sri Khalid Ibrahim said the woes of the 276 longhouse residents in PJS1 near Old Klang Road will be resolved soon.

He said a meeting with the residents would be held in a week to explain the state’s plan.

Khalid said he was confident that the matter would be resolved at that meeting.

“We have already acquired the property and I think the matter is solved,’’ he said yesterday after attending a green development programme in Shah Alam.

Khalid said the matter took a long time to solve because of disputes involving a school and temple.

“I am sure we can start the affordable home project for the longhouse residents soon,’’ he said.

StarMetro reported yesterday that 276 longhouse residents in PJS1 plan to protest at the office of Khalid if affordable homes are not built in the area.

Block E Buyers action committee chairman M. Sugumaran had said they were unhappy with Khalid for not keeping his word to build the homes.

Khalid had promised to build affordable homes four months ago after the Selangor State Economic Action Council meeting on June 16.

The residents are part of a group of squatters who were moved to PPR Lembah Subang and PJS1 longhouses eight years ago with the offer of low-cost flats. The flats have not been built.

By The Star

IOI, Dutaland rescind RM830m land deal

IOI Corporation Bhd and Dutaland Bhd have agreed to mutually rescind the sale and purchase agreement (SPA) for the proposed acquisition of 11,977.91ha of oil palm plantation land for RM830 million.

IOI said its unit Sri Mayvin Plantation Sdn Bhd and Dutaland's Pertama Land and Development Sdn Bhd had entered into a deed of rescission with immediate effect in a move to resolve all issues and disputes relating to the SPA.

"The parties are released from all obligations and liabilities in connection with the SPA and neither party shall have any further claim against the other in respect thereto," it said in a filing to Bursa Malaysia today.

IOI said following from the execution of the deed of rescission, OSK Trustees Bhd, the stakeholder jointly appointed by the parties, will proceed to refund the RM83 million deposit earlier paid by Sri Mayvin together with all interest accrued to Sri Mayvin.

In a separate statement, Dutaland said the rescission is not expected to have a material effect on the earnings, net assets and gearing of the company for the financial year ending June 30, 2012.

Dutaland said it would continue to manage the properties to generate positive returns.

By Bernama

Guocoland wants to buy PJ City Devt

GUOCOLAND (Malaysia) Bhd wants to buy PJ City Development Sdn Bhd from GuoLine Asset Sdn Bhd for RM29.8 million.

The acquisition will be financed wholly from borrowings, the company said yesterday.

Hong Leong Bank Bhd's Tan Sri Quek Leng Chan owns an indirect 65 per cent stake in GuocoLand.

PJ City owns two parcels of land in Petaling Jaya, one commercial and another industrial.

GuocoLand will convene an extraordinary general meeting to get shareholders approval for the acquisition.

By Business Times

Guocoland to buy firms

PETALING JAYA: Guocoland (M) Bhd has proposed to acquire PJ City Development Sdn Bhd for RM29.79mil cash.

It told Bursa Malaysia yesterday that the exercise involved the acquisition of five million shares in PJ City from GuoLine Asset Sdn Bhd.

Guocoland also announced that it had proposed to acquire PJ Corp Park Sdn Bhd from MPI Holdings Sdn Bhd for RM258,000 cash. PJ Corp owns two units of low-cost houses in Masai, Johor.

By The Star

KL-Singapore high-speed rail project on track

Kuala Lumpur: The high-speed rail system linking Kuala Lumpur and Singapore could take shape by next year, with three groups leading the early race to win the multi-billion ringgit job, people familiar with the plan said.

The Land Public Transport Commission (SPAD) is expected to start a feasibility study on the project early next year.

The commission had already completed a pre-feasibility study, SPAD chief development officer Azmi Abdul Aziz told Business Times.

SPAD will undertake a feasibility study next, which should take six to 12 months to complete, Azmi added.

If feasible, the project is estimated to cost as much as RM12 billion, with the interested parties offering either European or Chinese technologies.

It is believed that up-and-coming rail tycoon Tan Sri Ravindran Menon has teamed up with UEM Group to vie for the project.

Ravindran controls Skypark Terminal, which recently received an offer from the government to undertake a RM1.5 billion rail project.

The project is to connect the Keretapi Tanah Melayu Bhd (KTMB) station in Subang Jaya, Selangor, to the Skypark Terminal at the Sultan Abdul Aziz Shah Airport.

Business Times understands that the Ravindran-UEM venture made a presentation to the government early this year, specifically on the more than 300km high speed rail line.

Sources said they planned to lay railway lines parallel to the North-South Expressway from Kuala Lumpur, Seremban and Malacca to Johor Baru, before connecting to Singapore.

Others said to be in the running for the job are China Infraglobe Consortium-Global Rail Sdn Bhd and YTL Corp Bhd.

China Infraglobe-Global Rail consortium last made a submission for the job in 2009.

To date, it has yet to make a revised proposal to the government, a company official said.

YTL group managing director Tan Sri Francis Yeoh Sock Ping, who is in New York, declined to comment when asked if the company had made a fresh submission.

YTL, operator of the KLIA Express, first mooted the idea to build a high-speed rail in the late 1990s and again in 2006.

The project was put on hold in April 2008 due to high cost, which was estimated at RM8 billion.

In the middle of 2009, YTL expressed hope that the government would relook at the proposal.

It said it would build the rail line on the coastline of Peninsular Malaysia, rather than that mooted in an earlier proposal of building on the existing track.

Last year, the government said it would revive the project.

It was highligted as a high impact project in the government's Economic Transformation Programme roadmap in a bid to increase economic activities.

Yesterday, the government reiterated that it may go ahead with the project.

Transport Minister Datuk Seri Kong Cho Ha said it would wait for feedback from its Singaporean counterparts as the track would go into its land.

Germany's Siemens had previously offered its solutions to the project.

It proposed the use of its Velaro trains, which have a top speed of 350kph.

By Business Times

Uda seeks LRT joint venture with SPNB

UDA HOLDINGS Bhd had two weeks ago submitted a proposal to Syarikat Prasarana Negara Bhd (SPNB) to jointly develop the Dang Wangi LRT station.

The land, measuring 11,008 sq m in Jalan Ampang, is strategically located and has the potential for residential, commercial or mixed development.

In a statement, UDA Holdings chairman Datuk Nur Jazlan Mohamed said the group has over 40 years of experience in urban redevelopment and the technical capacity for the proposed joint venture with Syarikat Prasarana to develop the land.

By Business Times

iProperty ranked 4th by Aussie magazine

iProperty Group, an online property group, has clinched fourth place in the Top 100 Fastest Growing Business by Business Review Weekly (BRW), an Australian business magazine.

iProperty generated over AU$7.3 million in the 2010 calendar year and clocked an average growth of 223 per cent over the previous three years, making it the only ASX listed company in the top four.

The company also generated over 3.5 million unique visitors and over 45 million page views across the iProperty Group of leading property portals in Indonesia, Hong Kong, Malaysia and Singapore.

Its chief executive officer Shaun Di Gregorio said: "This recognition is a tremendous accomplishment to the Group and being part of the list is a testament to our hard work and dedication.

"This continued success is a reflection to our commitment to providing highly innovative products to our customers and assist them in searching for their dream home," Di Gregorio said in a statement today.

By Bernama

Prices of DBSS flats in Singapore soar

SINGAPORE: Design, Build and Sell Scheme (DBSS) flats have been attracting such strong interest that they now cost nearly as much as executive condominium (EC) units.

Their overall median price was now only S$100 to S$150 per sq ft (psf) lower than that of the condo units, said Lee Sze Teck, senior manager of research and consultancy at Dennis Wee Realty.

The scheme's popularity comes despite the fact that it is under review, following an outcry when Centrale 8 in Tampines made the news for its high asking prices in July.

Lee said the high demand was due mainly to the fact that the projects were located in mature estates, near MRT stations.

Prices for Trivelis, the latest DBSS launch in Clementi, were about S$580 to S$728 psf. The cost of new EC flats ranges from S$501 to S$820 psf, according to data that Lee gathered from sources such as the Housing and Development Board and the Urban Redevelopment Authority.

“The pricing of DBSS flats has been pushing the boundaries so much that they are now not far off from the prices of new EC projects under development,” he said.

DBSS flats, which are built on government land sold to private developers, were introduced in 2005 to provide more choices in the housing market. They have better design and finishes than standard flats, but unlike ECs, they cannot be privatised after 10 years or contain facilities such as pools.

Since the scheme was put under review, three projects that were already in the pipeline have been launched and they attracted strong interest. Some had as many as three bidders for every unit.

Lee said DBSS properties were attractive also because, unlike resale flats, they required no cash-over-valuation, the premium paid over and above the official value.

By The Straits Times Singapore

UK home costs jump in October

LONDON: British house prices jumped in October, mortgage lender Halifax said, in a rare sign the housing market may be weathering the economic turbulences better than many fear.

Home prices were 1.2% higher than in September, Halifax said. Prices were 1.8% lower in the three months to October compared with the previous year's period.

Analysts polled by Reuters had expected a monthly increase of only 0.1% and an annual decline of 2.3%.

“The housing market has proved highly resilient in recent months despite the weak economic recovery and the deterioration in the outlook for both the UK and global economies,” said Martin Ellis, Halifax housing economist.

“Despite these developments, house sales and the supply of properties for sale have remained very stable since late 2010,” he said. “The prospect of exceptionally low official interest rates over the foreseeable future is likely to continue to support the market in the face of a very difficult economic climate.”

Other surveys have painted a bleaker picture and many economists see house prices in Britain falling in the months ahead as the country is teetering on the brink of a recession.

Consumers cut back spending as their budgets are squeezed by soaring costs of living, which outweigh small wage increases.

By Reuters

Private property market unabated

An artist’s impression of Hijauan On Cavenagh, a project in district 9, Singapore

SINGAPORE: Selangor Dredging Bhd (SDB) is upbeat about the republic's private property market despite the economic uncertainties in the eurozone and the United States.

Its communications and corporate affairs manager, Yeoh Guan Jin said demand for private residential properties here was still positive with demand coming from Singaporean and foreign buyers.

“The property market registered 16% and 20% take-up rate for private residential properties in the first and the second quarter of the year respectively,” he said.

Yeoh told StarBiz at a sales gallery showcasing SDB's latest freehold residential project in Singapore Hijauan On Cavenagh.

He said as Singapore continued to welcome and attract affluent people and expatriates from all over the world, demand for private residential properties in the city state would remain good.

Yeoh said with no restriction to foreigners buying private properties in the republic, investers could expect to fetch good rental.

“With more Malaysians looking to invest in properties overseas, Singapore is the best place for them due to its close proximity with Malaysia,” he said.

Yeoh added that the company was optimistic the project would receive positive response, similar to its Okio Residences project launched in the second quarter of 2011.

Okio Residences a mixed freehold residential and commercial project to be built on a 0.2ha site at Balestier Road in district 12 had recorded about 70% take-up rate from Singaporeans as well as foreigners.

The 18-storey apartment block consists of 104 units of one and two-bedroom units priced between S$660,000 and S$1mil and 10 units of retail shops and offices priced between S$1.5mil and S$4.6mil.

Work on Okio Residences with gross development value (GDV) of S$102mil started in the third quarter of the year with expected completion in the last quarter of 2015.

Hijauan On Cavenagh, located on Cavenagh Road in Singapore's prestigious district 9, will be built on a 0.18ha site that was previously Cavenagh Mansion with expected completion in the third quarter of 2015.

“We are banking on the location of Hijauan On Cavenagh as the strong selling point to attract potential buyers,” said Yeoh.

He added that it was just minutes away from the Somerset, Dhoby Ghaut and Orchard MRT stations and close to the Orchard Road shopping belt, education institutions and Central Expressway.

Yeoh said the name reflected the greenery in a coveted green lung within walking distance from Orchard Road and a tree-lined passageway beside the Istana and adjacent to 25,000 sq ft of lush state land.

The Istana is the official residence and working office for both the president and prime minister.

The project will comprise a six-storey residential block of 41 high-end apartment units featuring five garden units with built-up area from 1,001 sq ft to 1,141 sq ft.

The 28 typical units has floor area from 527 sq ft to 1,249 sq ft and eight penthouses from 463sq ft to 1,884 sq ft with each unit priced from S$1.3mil to S$3.5mil.

“Being in a prestigious location and close to the Istana, property development projects along the area must adhere to certain rulings such as they should not be higher than the Istana,” said Yeoh.

SDB's other projects in Singapore were the 22 units of low-rise condominiums called Jia at Wilkie Road with GDV of S$55mil completed in December 2010.

It was also developing the high-rise condominium project Gilstead Two at Gilstead Road consisting of 110 units with a GDV of S$200mil and the project is expected to be ready in the fourth quarter of 2014.

By The Star

SP Setia adopting the Aussie standard of property development

MELBOURNE: Through its property ventures in Australia, SP Setia Bhd aims to adopt the best practices from that market for its other developments, said president and CEO Tan Sri Liew Kee Sin.


(From left): Setia Melbourne CEO Choong Kai Wai, Liew, Fulton Lane architect Karl Fender, Chor, Lee and Malaysian consul-general Dr Mohammad Rameez at the launch.

“We need to blend in with the local environment that is important. When you go to a new place to invest, you have to learn first before you think about making money. You need to learn how things work,” Liew said at the launch of the developer's Fulton Lane property in the central business district here.

“Things are transparent here. We think that by learning the systems here, it will make us a better developer in Malaysia. For instance, respecting the environment is something the Australians do well. In terms of design, your building is not allowed to cast a shadow on another building.”

The 487-apartment unit Fulton Lane, which comprises two residential towers and a retail podium, has sold about 80% of the first tower block and 30% of the second block.

Set to be completed in 2014, the land was bought for A$30mil in March last year and has a gross development value of A$470mil.

“I think Melbourne is a good market, but we will not be big here. We will start small, we want to understand the market and make sure we build a brand like how we did in Malaysia, which is a brand that people can trust.

“We'll do it slowly and make sure we execute it to the best quality. In Malaysia for example, it took us 20 years to build SP Setia. We'll be slow and steady on this.”

Although Liew maintained that the Malaysian property market was still SP Setia's main focus, the company was hoping for revenue from its overseas projects to hit 30% in five years.

He was not concerned by talk of a softening property market in Melbourne, saying: “A couple of weeks ago the Australian government reduced interest rates by a quarter per cent. If they reduce it by another quarter per cent, that would be perfect as the currency will drop and people will start to invest again.”

In his speech earlier, Liew said Melbourne had 30,000 Malaysians with permanent residence status, making it an attractive proposition for SP Setia.

The first block in Fulton Lane has received interest from investors as well as owner-occupiers, primarily Malaysians.

The second block, which is the taller of the two, has attracted the locals along with Indonesians and Singaporeans. SP Setia will also begin marketing the project in China in a few weeks, after similar excursions in Hong Kong, Jakarta and Brunei.

SP Setia Melbourne sales and marketing manager Jeffrey Ong said there had been some interest from institutional investors as well, but this was at the discussion stage.

On the proposed mandatory general offer by Permodalan Nasional Bhd, Liew said the state investment arm had come to an agreement with him and this would be reflected in the offer document that was to come from PNB.

“This is subject to the Securities Commission's approval, and if it goes through, it will be in the offer document. That's why it was delayed. We want to play fair to all the shareholders and keep them fully informed,” he said.

On SP Setia's plans for its 2.23-acre South Yarra land, also in Melbourne, Ong said it would have 329 apartment units and cater to local buyers. The A$250mil GDV project is still in the planning stage, and Ong said it was slated to be launched next year and would take some three years to develop.

The launch was attended by Housing and Local Government Minister Datuk Seri Chor Chee Heung and SP Setia Foundation chairman Tan Sri Lee Lam Thye.

By The Star

Melati Ehsan back in the news after winning RM297mil housing contract

PETALING JAYA: Low profile turnkey contractor Melati Ehsan Holdings Bhd is in the limelight again, this time for bagging a RM297mil contract to design and build residential flats for the Housing and Local Government Ministry's People's Housing Programme (PPR).

Melati Ehsan was also in the news recently when it was reported that the company's massive RM1.62bil property development project with the Selangor State Development Authority (PKNS) in Kelana Jaya, Petaling Jaya (that will see it redeveloping the PKNS Sports Complex) would likely go ahead despite opposing views from the residents in the area.


Yap holds an indirect 49.74% stake in Melati Ehsan.

Little details have been provided about the RM297mil contract from PPR. The company said the contract had been awarded to its wholly-owned subsidiary, Pembinaan Kery Sdn Bhd, and that it had just received the letter of award. It said the contract would be split into two portions, with one part valued at RM82.1mil for the provision of 500 units of flats, while the remainder 1,600 units of flats would be built for RM215.9mil. The company also revealed that the properties would be built in Kuala Lumpur but with no further details of the locations.

Going by the numbers revealed by Melati Ehsan in the announcement, it seems that it will be building the flats for between RM135,000 and RM164,000. The flats are expected to be completed earliest by 2014, assuming that the construction stays on its stipulated time line of completion of 30 months and 36 months respectively. Melati Ehsan has yet to reply to questions from Starbiz for details on this new award.

Melati Ehsan's joint venture with PKNS is to redevelop the PKNS Sports Complex, which is 30 years old, and includes a field, six tennis courts and a clubhouse. The planned development by Melati Eshan and PKNS is a RM1.62bil sports-themed mixed development, with five 35-storey apartment blocks, two 15-storey business complexes, a performing arts centre and an integrated sporting hub.

The company is helmed by managing director Tan Sri Yap Suan Chee, who has an indirect stake of 49.74% in the company. Melati Ehsan, which was listed in 2007, had completed mainly infrastructure construction projects like the Trans Eastern Kedah Interland Highway for RM287mil, and also two Carrefour hypermarkets in Kota Damansara and Bandar Tun Hussein Onn.

Its other substantial shareholders include the country's pilgrims fund board, Lembaga Tabung Haji, which has a direct 7.28% stake in the company, and according to its 2010 annual report, Melati Ehsan's 30 largest shareholders collectively own 89.54% of the company.

It is also involved in several ongoing residential housing projects in the Klang Valley, namely in Bukit Tengku, Bukit Jalil and also a mixed development in Pandamaran, Klang, which will comprise 501 units of residential houses and 320 shoplots, along with commercial areas covering 8.97 acres and industrial areas covering 6.92 acres. It has also completed housing projects in Kota Damansara, namely Bayu Perdana 2 and Bayu Damansara. In Johor, it has completed several phases of its development named Taman Ehsan Jaya and is still busy with the mixed development which comprises over 5,000 units of residential and commercial units.

Listed at an initial public offering (IPO) price of RM1.28, the counter has not touched its IPO price since June 2008. Although still profitable, its earnings have been seen a slight decline. For its year ended Aug 31, 2011 (FY11), the company recorded a net profit of RM6.1mil on the back of RM86.55mil in revenue, while for FY10, FY09 and FY08, it had recorded net profit of RM5.47mil, RM12.69mil and RM18.9mil respectively.

The company had cash balance of RM34.61mil as at the August 31, 2011 and its share price had been trading at the 80 sen range, below its net tangible asset of RM1.21.

With a current market capitalisation of RM96mil, it is interesting to note that the recent contract it has secured is more than two times its market value.

By The Star

Rahsia Estates Resort to expand in Langkawi

PETALING JAYA: Rahsia Estates Resort, Residences and Spa, a RM300 million development in Langkawi, Kedah, is eyeing additional land for future development on the island.

The developer now has 6.89ha of land located near Kampung Temoyong which is some 15 minutes away from the airport.

Work on its first phase will start next month. Chief executive officer of Rahsia Estates Sdn Bhd, Hanizah Tun Abdul Hamid said that it is already negotiating for an additional 1.62ha of land and is looking for more land in the vicinity of Rahsia Estates development.

"We could possibly buy more land and we are open to forming joint-venture for our future projects," Hanizah said, adding that a likely partner would be one which has similar aspiration and passion for such a project.

Rahsia Estates, which faces the Lake of the Pregnant Maiden, is promoting itself as an eco-tourism resort as it will be maintaining the mangrove in the area as well as some 0.81ha of forest within the resort.

The resort's hotel will conform to the Green Building Index. It plans to invest in enhancing the fishing jetty for the local fishing community's benefit.

The mixed hotel-residential development, expected to take three years to complete, comprises several precincts that will include both luxury villas and suites.

Precinct 1, Phase 1 - Tree Top Villas - will have six main villas with a total of 50 units. Work will start early 2012 and is slated for completion in the first quarter of 2013.

Rahsia Estates is looking at selling these units and leasing back at least 80 per cent of the units sold.

Meanwhile, the hotel component with about 116 rooms to 119 rooms will not be sold.

"Due to high material costs, we are expecting return on investment to take 12 years ... but we are working to push it to eight years," she told Business Times in an interview.

Rahsia Estates' plan is to sign a management contract with a resort manager that will run both the hotel and the villas.

The hotel, Hanizah said, is likely to be a four-star as several recent new hotel announcements on the island have been in the five-star category.

The developer, which is already in talks with several hotel operators, is keen to sign an operator that can deliver hospitality as experienced in Bali and Thailand. "The Thais and the Balinese have perfected the art of hospitality," she said.

Meanwhile, Phase 2 of Precinct 1 will see an addition of 50 villas, which will be developed at a later stage.

Precinct 3 will have 32 Cabana Villas while Precinct 4 comprises 31 units of Tree Top Chalets.

Rahsia Estates is a member of HD Concepts Consolidated Sdn Bhd group of companies. Riverbank Suites, Merdeka Plaza and the New Kuching Courts in Sarawak are among the developer's previous projects.

By Business Times

GuocoLand proposes to acquire PJ City

GuocoLand (Malaysia) Bhd has proposed to acquire the entire equity interest in PJ City Development Sdn Bhd from GuoLine Asset Sdn Bhd (GASB) for RM29.785 million cash.

PJ City is the beneficial owner of two parcels of land situated in Section 32 in Petaling, Selangor. The lands are located within Section 51A, Petaling Jaya next to the Federal Highway at approximately two kilometres south-west of the city centre of Petaling Jaya and 12 kilometres south-west of the city centre of Kuala Lumpur.

In a filing to Bursa Malaysia today, GuocoLand said it has also proposed to buy PJ Corporate Park Sdn Bhd (PJ Corp) from MPI Holdings Sdn Bhd for RM258,000 cash. PJ Corp is the registered proprietor of the lands.

PJ Corp owns two units of low-cost houses located in Masai, Johor. These houses are residual units from a housing development project undertaken by PJ Corp in the 1980s. The total audited net book value of these two low-cost houses as at June 30, 2011 was RM44,000.

GuocoLand said the proposed acquisitions would enable the group to increase its land banks in strategic locations for future developments and to enhance its earnings.

"As PJ Corp is the registered proprietor of the lands, the proposed acquisition of PJ Corp will enable the group to have better control over the administrative matters in relation to the lands," the company said.

GuocoLand said that the proposed acquisitions are expected to contribute positively to the earnings of the group in future years.

By Bernama

Demand for luxury residential properties expected to turn cautious

PETALING JAYA: Demand for luxury residential properties is expected to turn cautious, given greater economic uncertainties and a tightening of credit by banks, DTZ Research said in its latest Property Times market report.

In the report for Kuala Lumpur for the third quarter, the research house said there would be an increasing downside risk on prices at the higher end of the market if the conditions got worse next year.

“The residential sector experienced significant completions in the quarter and this will put pressure on rentals, especially in the larger prime condominium units where demand has not kept pace.

“Generally, while price remains stable, new pressure to sell is expected as some owners taking delivery of completed units may wish to exit their investments. There remained selective demand for new launches,” it added.

The quarter saw the completion of a significant number of projects with an additional 2,278 condominium units in Kuala Lumpur, including two city-centre projects: Brunsfield Embassyview and The Pearl, eight projects in Mon’t Kiara, and one in Bangsar.

A further 52 condominium units are expected to be completed by the end of the year, all of which are in the city centre.

In 2012, about 5,384 units are expected to enter the market with about 92% or 4,952 units located in the city centre.

A boutique luxury condominium project in Persiaran Raja Chulan, St John Woods Residence, has reportedly received strong response, with almost half of the 48 units booked within two days. The selling price of the units are between RM3.3mil and RM4.4mil each (or RM900 per sq ft).

According to Property Times, the average capital value of high-end condominiums in Kuala Lumpur is generally stable at RM626 per sq ft, with properties in the Kuala Lumpur city centre averaging RM902 per sq ft.

“The market may see short-term selling pressure as owners of newly delivered units may exit their investment,” it pointed out.

The average rental value of high-end condominiums in Kuala Lumpur is stable at RM3.50 per sq ft per month but new completions will keep the rate competitive, especially for larger units where demand has not kept pace with supply.

It noted that to maintain or increase pricing level, developers had resorted to smaller units marketed under the guise of small-office home-office in mixed developments to appeal to younger buyers seeking more lifestyle options and to investors.

The outlook for the office sector is likely to be more sombre in the light of substantial pipeline supply in 2012.

Three office buildings are expected to be ready by the fourth quarter this year, which will add 1.1 million sq ft to the year’s total supply of about 2.5 million sq ft. They are D’tiara Amanaraya Corp Tower, Crest Tower and Lot E @ KL Sentral, of which the first and third properties will be substantially owner-occupied.

The report pointed out that external headwinds were expected to create uncertainties and the overall net absorption rate could further slow in the fourth quarter, adding that the situation would not provide comfort to a market that was expecting 2012 to be a potential tipping point with some 7.4 million sq ft projected for completion in the office market.

During the third quarter this year, leasing activities were driven mainly by the oil and gas, information technology (IT) and financial sectors.

With no new completions adding to competitive pressure, office rents remained stable with prime gross rental rates at RM6.22 per sq ft a month.

Among the major leases and relocations were that of RHB Insurance at The Icon for 100,000 sq ft and Touch n Go taking up 67,000 sq ft at The Horizon, Block 6, Bangsar South.

The third quarter saw no change in the capital value of office buildings, with good quality suburban offices sold at RM600 to RM700 per sq ft. The average capital value of prime office in Kuala Lumpur stood at RM807 per sq ft.

The investment property market saw an increase in both value and activities, with total value topping RM1.3bil in the third quarter, an increase of 39% from the second quarter.

There were 10 deals in the quarter – five offices, two mixed developments, and a retail, industrial and residential property each – compared with eight in the second quarter.

The biggest deal recorded in the third quarter was the sale via public auction of The Putra Place, which was sold to Sunway REIT for RM513.9mil.

The other major transaction was a prime office building in Cyberjaya – Bangunan Lestari Kumpulan Emkay – that was on a long-term lease to Shell, with an estimated initial yield of 5.7%.

Most of the properties sold are located in and around Kuala Lumpur, with one transaction recorded in Penang, a Tesco-leased hypermarket in Tanjung Sri Pinang, and in Johor Baru where a major prime stratified office, Menara Landmark, was sold via a public auction to developer Daiman Bhd.

The investment market was more active with strong deal flows from investors and also supported by end-users buying for own occupation. But going forward, the market is expected to be dominated by local investors as foreign investors have become more cautious.

In terms of pricing, Menara Landmark was sold at RM164 per sq ft, which the report noted was significantly below the RM600 to RM700 per sq ft fetched by good quality suburban offices in Kuala Lumpur.

Three of the transactions during the quarter involved mid-sized offices purchased for owner-occupation. The buyers are from the IT, oil and gas, and infrastructure sectors which are key sectors under the Economic Transformation Programme.

As for the retail sector, Property Times said rental growth was likely to be moderate going forward, especially with new malls still sprouting up in the suburbs in an increasingly tougher operating environment.

About 860,000 sq ft of new space was added in the quarter in Kuala Lumpur with the completion of three major retail centres – Suria KLCC (extension), Solaris 2 and 1 Shamelin Shopping Mall. The total stock reached 45.8 million sq ft in the Klang Valley.

It said the overall outlook for the retail sector was expected to remain optimistic due to a stronger ringgit, with total retail sales projected to grow from RM182.44bil in 2011 to RM279.83bil by 2015.

The average occupancy rate at retail centres registered a slight increase to 91% in Kuala Lumpur and 88% outside the capital. However, newly completed retail centres have experienced slow leasing rate, given the increasing market saturation of retail facilities even in good suburban locations.

Meanwhile, growth in online shopping poses a challenge to the domestic retail industry which is facing higher costs of goods and operations.

In 2010, there were about 1.1 million online shoppers with an average RM2,500 spending per head. According to a research by AC Nielson, the online purchasing market had reached RM1.8bil in 2010 and is expected to increase to RM5bil in 2014.

“This rising trend is a challenge to local merchants who will have to adopt multi-channel retail strategy to capture the rising online market,” Property Times added.

By The Star